GOP Group Wants to Cap Spending at 18% of GDP

[I AM NOT THAT GUY 5,715]

Conservatives' bill aims for strict spending limit of 18 percent of GDP

Key members of the conservative Republican Study Committee introduced a bill to make good on their pledge to “cut, cap and balance” federal spending.

RSC Chairman Rep. Jim Jordan (R-Ohio) endorsed the bill submitted Friday by top-ranking GOP appropriator Rep. Jack Kingston (Ga.) that would cap spending at 18 percent of GDP.

“It’s simple, spend what you take in. What the RSC is bringing forward is a cut, cap and balance approach: Cut spending significantly in 2012, cap spending in the midterm, and long term do a balanced budget that will actually be a game changer,” Jordan said at a press conference led by Kingston on Friday.

Kingston explained that his legislation “simply says that revenues and spending will be coordinated as a percentage of GDP – it balances the budget within five years.”

Fellow appropriations committee Reps. Jeff Flake (R-Ariz.) and Tom Graves (R-Ga.) spoke in favor of Kingston’s spending cap proposal, that they said would require the government to live within its means.

Kingston’s bill does not specify which cuts to make to discretionary and mandatory spending.

Graves explained “it creates a box that the government has to operate within ... that’s the best way to illustrate it: You set the confinements, the boundaries; we’re not talking about what’s in that box ... but whatever you can fit inside that box is fine – but the box is only so big, and over the next five years continues to shrink over time until you get down to 18 percent.”

Even sacred defense programs could be slashed if Congress failed to make cuts elsewhere, Flake said.

Flake, a vociferous fiscal hawk, explained “that allows individuals who think that we shouldn’t cut defense at all to come in and make cuts elsewhere. If they don’t then we’ll see across the board cuts; those cuts come, automatic rescissions if government fails to hit its spending targets – and if I know anything, Congress will fail to hit its spending targets.”

Kington’s bill is one of several similar variations of measure that would cap federal spending. One measure in particular, sponsored by Sens. Bob Corker (R-Tenn.) and Claire McCaskill (D-Mo.) on the other side of the Capitol, would cap spending at roughly 20 percent.

“If you shoot for 20 percent, then you are building in deficits, and we want to eliminate the deficit,” Kingston said.

Kingston says that his measure doesn’t allow for deficit spending and he feels confident it will gain support from his conservative colleagues.

All four GOP lawmakers indicated that they would like for the 18 percent cap proposal to be part of negotiations on increasing the debt ceiling.

“We hope that this will be part of the debt-ceiling negotiation,” Kingston said noting his support for Speaker John Boehner’s (R-Ohio) speech in New York on Monday in which he demanded that spending cuts equal the amount of increase to the debt limit.

The Treasury Department indicated recently that it would need an increase of nearly $2 trillion in borrowing authority to make it through the 2012 elections next November.

Jordan added that “there’s been a lot of talk about some kind of cap proposal as part of that midterm, like we describe it, in the solution.”

Boehner however, wouldn’t tie himself to any particular spending-cap proposal to push during negotiations.

“I do think that there are going to have to be budget process reforms. I don't want to tie myself down in terms of what those are. But I don't want phony caps. I don't want phony targets,” Boehner said Thursday.

Boehner’s warning failed to dampen the enthusiasm of the conservative lawmakers however.

The RSC Chairman pledged that conservatives “look forward to pushing (Kingston’s bill) as we move ahead” in the debate over increasing the debt ceiling.

GOP leaders can expect to receive a letter from the RSC when Congress returns from a weeklong district work period, that states in no uncertain terms their position on cut, cap and balance in terms of the broader debate over increasing the debt limit.

And Kingston’s bill has been singled out in the letter currently gathering support among the more than 175 members of the RSC, according to a copy obtained by The Hill.

“To ensure that spending cuts continue, we need statutory, enforceable total-spending caps to reduce federal spending to 18% of Gross Domestic Product (GDP), with automatic spending reductions if the caps are breached. Reps. Mack, Kingston, Flake, and Graves, for example, are developing spending-cap legislation to this effect,” the letter states.

http://thehill.com/homenews/house/161293-conservatives-bill-aims-for-strict-spending-limit-of-18-percent-of-gdp

Edited May 17, 2011 by Some Old Guy

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RSC Chairman Rep. Jim Jordan (R-Ohio) endorsed the bill submitted Friday by top-ranking GOP appropriator Rep. Jack Kingston (Ga.) that would cap spending at 18 percent of GDP.

“It’s simple, spend what you take in.

of GDP?

That is strange, seeing how a much more accurate metric for "what you take in" is available... it's literally what you take in. Why use the GDP as the denominator? Sounds like statistical sorcery to me.

[Usui Takumi 1,562]

of GDP?

That is strange, seeing how a much more accurate metric for "what you take in" is available... it's literally what you take in. Why use the GDP as the denominator? Sounds like statistical sorcery to me.

It may be based the theory that no matter what you do tax-wise, tax revenue will max out at 19%.

[Saddle Bronc 124]

of GDP?

That is strange, seeing how a much more accurate metric for "what you take in" is available... it's literally what you take in. Why use the GDP as the denominator? Sounds like statistical sorcery to me.

and that is strange to you?